For small businesses, there are no bailout plans. They are on their own, and they would be wise not to expect any help from their bankers. Banks are starting to take a close, preventative look at these borrowers. Business Week reports that JPMorgan Chase suspended credit lines for thousands of small businesses, which had been clients of Washington Mutual before it was gobbled by Chase in September 2008.
In many cases, the borrowers had not defaulted, but their credit scores had tanked. They were given these options: Pay off their balance, convert their credit line into a loan or go into default. Those who convert will undoubtedly see higher rates. There are likely other banks undergoing similar exercises right now. It may seem unfair, but right now there still just isn't enough liquidity to go around.
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